Competition for consumers' time and money will intensify in the next five years as new forms of electronic and digital media multiply, according to a report issued last week by the private equity firm Veronis Suhler Stevenson. In addition, what the VSS report, Communications Industry Forecast 2006—2010, calls user-generated content (blogs, podcasts, etc.) will eat into spending on traditional media, while more content will move to mobile platforms. Total spending on media products is projected to increase at a 4.5% annual rate in the 2006—2010 period, to $231.2 billion.

Within this complex media market, book sales are expected to grow at a compound annual rate of 3.2% over the next five years, a better pace than most other print segments. The time spent reading books annually will actually increase and money spent on books per person will rise slightly, but will still lose market share (falling from 6.8% to 6.4%) to other media options.

Publishers have slowly been testing the digital and online markets, and the CIF estimates that online book content spending—spending on e-books, online versions of printed copies and audio podcasts—rose 68% in 2005, to $74 million.

One publisher aggressively working to explore the small but growing market for book content sold in different formats is Harlequin. The company launched its first subscription service for cell phones in April, in a deal done under its patnership with Vocel. At present, the service, Harlequin-on-the-Go, is limited to Verizon users, but Pam Laycock, executive v-p for Harlequin, said the company hopes to add Sprint and Cingular by the end of the year. Harlequin charges $2.49 per month for a package that features three daily reads (short chapters of original stories) plus a poll and games.

Since launching in the spring, Harlequin's package has regularly been in Verizon's top 10 "get going" options, Laycock said. She declined to say how many subscribers have signed up, and acknowledged that over the short term, there is not much money to be made in cell phones. "This is an investment for the future," she said. Because the service is available only on Verizon, Harlequin has not aggressively promoted the service, but that will change when Sprint and Cingular come on board, Laycock said.

In another initiative, earlier this month Harlequin launched an e-book boutique on its site. Initial sales have been strong, Laycock said, nearly rivaling sales through third-party providers.

Media Spending and Usage, 2006—2010
(selected categories)

Annual Compound Sales Growth Spending Per Person 2006 Spending Per Person 2010 Hours Spent Per Person Per Year on Media 2006 Hours Spent Per Person Per Year on Media 2010
Source: Veronis Suhler Stevenson, Communications Industry Forecast
Home Video 1.8% $114.24 $119.36 63 67
Books 3.2 97.04 106.38 107 108
Video Games 6.1 33.59 41.52 75 86
TV 7.2 306.70 384.55 1,673 1,733
Mobile Content 12.3 11.43 16.84 11 28